Prime Minister Mostafa Madbouly and Minister of Communications and Information Technology Amr Talaat witnessed the signing of a cooperation protocol between the General Authority for Investment and Free Zones (GAFI), the Financial Regulatory Authority (FRA), and the Information Technology Industry Development Authority (ITIDA) to support start-ups in Egypt.
The protocol was signed by CEO of GAFI Mohamed Abdel Wahab, Chairperson of the Board of Directors of the FRA Mohamed Omran, and CEO of the ITIDA Amr Mahfouz as part of the state’s efforts to create an investment climate and create an economy that is competitive and diversified based on innovation and knowledge.
The protocol stipulates encouraging investment in Egyptian start-ups; attracting capital and financing to them; and fostering more local, regional, and international partnerships in a way that contributes to increasing the added value of the Egyptian economy, making Egypt a regional and international centre for technology based on creativity and entrepreneurship.
The three bodies also agreed to create a legislative and procedural environment that attracts investment, research innovative solutions that suit the nature of the work of emerging companies, facilitate their transactions, and create a suitable work environment for entrepreneurs in a way that attracts local and international capital to form partnerships and finance the growth of emerging companies in Egypt.
According to the protocol, GAFI will prepare a unified form for the shareholders’ agreement to establish start-up companies; verify the validity of the initial evaluation of emerging companies by estimating the investment required to operate and start the activity; and determine the appropriate timing and method for pumping new investments through public offerings, mergers, or acquisitions.
The FRA will also establish facilitating controls for the transfer of ownership of companies and entities that engage in venture capital activity by investing in start-up companies through financing tools that can be converted into shares and will also define procedures for transferring ownership of shares in emerging companies in order to ensure the implementation of ownership transfers in the stock exchange.
Meanwhile, the ITIDA will provide more protection for minority investors in emerging companies through new mechanisms, such as including appropriate clauses in shareholder agreements and for start-ups to join them.